Should You Sweat The Small Stuff? Why Small Savings are Worth the Effort

Is it worth worrying about small savings? A dollar here a few cents there? This article shows how small savings can add up to big savings.

‘Take care of your pennies and your dollars will take care of themselves.’ Scottish Proverb

Is it worth your time and energy to save a few cents here and a couple of dollars there?

I mean, what’s a couple of dollars on a coffee, right?

Not that I’m against a coffee splurge, but it can be surprising just how much these small expenses add up.

If you’re in need of a budget overhaul, or you have savings goals you want to work towards, but there are so many things you could do and you’re feeling overwhelmed, it can be a good idea to…

Start small.

Because small change adds up.

And because small expenses are easier to deal with.

Small change adds up

Here’s a hypothetical example. Just say these are the savings that you decide you can easily make:

Item	Savings	Monthly Savings
Bread	$.50 per loaf @ two loaves per week	$4
Takeaway dinner	1 less takeaway per month	$25
Daily Coffee	2 less per week @ $4 each	$32
Magazine subscription	Cut just one subscription	$5
Telephone Bill	Change contract (this was actually our savings when changing contract)	$10
Electricity	General savings ie turning off lights and computers, using dishwasher and dryer less etc	$10
Drive less, walk more	Petrol savings @ $2.50 per week	$10
Clothing	1 less item per month	$20
Bank fees	Switch to a no-fee account	$5
Monthly Total		$121

An extra $121 dollars in the pocket every month isn’t bad and it’s a gain made with fairly easy changes to the way you spend.

(Notice I didn’t say ‘cut out takeaway altogether’, or ‘stop drinking coffee’. These are small, doable changes that can save you a few dollars here and there.)

But here’s the exciting bit:

the total yearly savings is $1,452.

A few small changes can add up to some substantial savings!

Of course, this is just a short example. There are hundreds of expenses where you can shave and save.

Take your lunch to work instead of eating out, drop the Pay TV (or switch to Netflix), join the library instead of buying books, shop second-hand, and drink filtered tap water instead of bottled.

In fact, once you get into the swing of things, you’ll find ways to save money on just about everything you buy. And those savings will add up big time.

When we first became a one-income family, we looked at our budget and thought there was no way we would be able to cut our expenses. Yet we’ve managed to cut them enough so that I don’t have to work and we’ve had a child in the meantime.

[Two children now.]

I can’t believe now, how much we wasted my wage. I work again now that the kids are older, and the experience of living on one wage helped us to save more of my wage now that I’m working again.

Small expenses are easier to deal with

If you’re feeling overwhelmed by the thought of cutting back (where do I start? it’s all too hard? how am I supposed to pay off this huge bill?) then starting small is the answer.

And by small, I mean baby-step small.

‘Groceries’ is too big an expense. Instead, think about how you can save money on bread or toilet paper or breakfast or snacks and each of these small savings will add up to significant grocery savings.

Or, rather than looking at how to save money on electricity, think about saving money on cooking, or boiling the kettle, or heating or when using electronics.

Small savings are easier to deal with. And each small saving adds up over the year. Once you’ve gone through every expense in your budget, one small step at a time, you could potentially save thousands of dollars a year (or in our case, a whole wage).

‘…recast larger problems into smaller, less arousing problems, [so you] can identify a series of smaller controllable opportunities of modest size that produce visible results.’ [source via Pop Economics]

And if you need that extra boost (or you like doing these kinds of exercises) keep an anti-budget of all the little savings you make and all the times you don’t spend money. You will be surprised just how quickly it all adds up.

Finally, to supercharge your savings, couple small savings with some easy big wins and if you put aside what you save, you’ll be on top of your budget in no time.

Other Benefits of Chasing Small Savings

Other reasons to save your pennies include:

There are more opportunities to save small amounts than large amounts. It’s great to save thousands on the purchase of a new car, or hundreds on a new washing machine, but these purchases happen infrequently. The opportunity to make small savings here and there occurs every single day.

It’s easy. Giving the toothpaste an extra squeeze, buying home brand, turning out the light takes little effort.

It is a strategy that is available to everyone. No matter what your circumstances are, anyone can save a few cents or a few dollars here and there. Even the kids can help out!

Combining small savings with compounding increases the payload. Here’s a KEY STRATEGY that people forget: when you save money on something, immediately deposit it into your high-interest savings account or put it towards your debts. Earn money on your money with compounding interest OR save a packet by throwing every last cent at your debts to pay them down faster.

Compounding is a means to increase savings and reduce debt. It is a simple strategy that anyone can put into action, no matter how much money you have.

You’re often saving more than just money. Waste accounts for a lot of our spending. Not wasting the last of the jar or the bottle doesn’t just benefit your hip pocket, it’s a boon for the environment too. The two seconds you take to scrap the last from the jar means one less item that ends up in landfill each year. One less toothpaste. One less sauce bottle. One less shampoo bottle. The waste reduction compounds as well as the financial savings.

Small savings shouldn’t take over your life. But scraping the extra jam from the jar or switching off the TV at the wall or buying home brand isn’t hard or time-consuming, but each of these micro-habits can lead to bigger savings over the course of a year.